News Column

Actelion delivers strong half year operational and financial results

July 21, 2014

Actelion Pharmaceuticals Ltd / Actelion delivers strong half year operational and financial results . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement. ALLSCHWIL/BASEL, SWITZERLAND - 22 July 2014 - Actelion Ltd (SIX: ATLN) today announced its results for the first half of 2014. OPERATING HIGHLIGHTS * Opsumit - US launch momentum remains strong * Opsumit - Ten market introductions in HY 2014; filed in Japan * Selexipag - Phase III GRIPHON study in PAH meets primary endpoint * Tracleer - Demand robust in non-Opsumit markets FINANCIAL HIGHLIGHTS * Product sales of CHF 993 million, up 17% at Constant Exchange Rates (CER), 11% excluding US rebate reversals * Core earnings of CHF 421 million, up 35% at CER, 21% excluding US rebate reversals * Core EPS of CHF 3.25, an increase of 48% at CER * Upgraded 2014 financial guidance - Core earnings growth to be at least in mid-teen percentage range and when excluding rebates reversals to be at least low double-digit - all at CER -----------------------------------------------------------------------       Variance ----------------- CHF million H1 2014 H1 2013 CHF % CER((1)) % (except for per share data) ----------------------------------------------------------------------- Total product sales 993 884 12 17 ----------------------------------------------------------------------- US-GAAP Operating income 347 262 32 42 ----------------------------------------------------------------------- Core earnings (Core operating income) 421 331 27 35 ----------------------------------------------------------------------- US-GAAP EPS (fully diluted) 3.62 1.73 109 124 ----------------------------------------------------------------------- Core EPS (fully diluted) 3.25 2.34 39 48 ----------------------------------------------------------------------- As of 30 June 2014, Actelion had cash and cash equivalents of CHF 947 million. In addition, Actelion holds 9 million treasury shares. (1) CER percentage changes are calculated by reconsolidating both the H1 2014 and H1 2013 results at constant currencies (the average monthly exchange rates for H1 2013). Jean-Paul Clozel, MD, Chief Executive Officer, commented: "In the first half year 2014 we have made great strides in delivering on our strategy; by growing our PAH franchise, by advancing our specialty franchises and by optimizing our profitability. Looking ahead, we are confident that we will continue to create value for all our stakeholders, and deliver significant returns to shareholders. Highlights are the strong launch momentum of Opsumit in key markets around the world, the positive Phase III data with selexipag and 35 percent increase in core earnings." Otto Schwarz, Chief Operating Officer, commented: "Our commercial strategy for Opsumit has now been validated with multiple successful launches in different geographies. We have a strong launch momentum across all markets where Opsumit is available, in particular in the US, Germany, Switzerland and the Netherlands. Reimbursement and formulary coverage in the US have now been obtained with most leading healthcare insurers." In June, Actelion announced the top-line results of the pivotal Phase III GRIPHON study in 1,156 patients with pulmonary arterial hypertension (PAH) with selexipag, the first selective oral prostacyclin IP receptor agonist. Initial analysis showed that the event-driven outcome study met its primary efficacy endpoint with high statistical significance. Selexipag decreased the risk of a morbidity/mortality event versus placebo by 39% (p<0.0001). Efficacy observed was consistent across the key subgroups; age, gender, WHO Functional Class, PAH etiology and background PAH therapy. Patients were treated for up to 4.3 years. The overall tolerability profile of selexipag in GRIPHON was consistent with prostacyclin therapies. AndrÉ C. Muller, Chief Financial Officer, commented: "Excellent product sales, US rebate reversals and ongoing cost control have resulted in core earnings growth of 35 percent -  21 percent excluding the impact of reversals for US rebates accrued in prior years. Since the product contribution has exceeded previous forecasts, we are now able to significantly upgrade our guidance for the full year 2014." Given current business dynamics, Actelion expects to deliver higher profitability in 2014 and is therefore raising its full-year guidance. Barring unforeseen events, Actelion now expects 2014 core earnings growth to be at least in the mid-teen percentage range at constant exchange rates. This upgraded guidance is a result of a higher product contribution and the positive impact of rebate reversals, mostly related to Medicaid/Managed Medicaid rebates in the US. Removing the impact from rebates associated with US patient assistance programs, Actelion expects 2014 core earnings growth to be at least low double-digit, at constant exchange rates. This very strong 2014 performance will set a significantly higher base for 2015 and Actelion will therefore review its guidance early next year. HALF YEAR REPORT Full details on the progress made during the first six months of 2014 are available in Actelion's 2014 Half Year Report, available from www.actelion.com. CLINICAL DEVELOPMENT UPDATE Actelion's promising development pipeline comprises novel compounds addressing a broad range of diseases, including cardiovascular and immunological disorders as well as central nervous system disorders and infectious disease. Actelion's late-stage product candidates includes the novel antibiotic cadazolid under investigation for Clostridium difficile-associated diarrhea (CDAD). ------------------------------------------------------------------------------- Phase Compound Indication Study Status ------------------------------------------------------------------------------- III Selexipag Pulmonary arterial GRIPHON Filing in hypertension preparation ------------------------------------------------------------------------------- Clostridium III Cadazolid difficile-associated IMPACT Ongoing diarrhea ------------------------------------------------------------------------------- III Macitentan Eisenmenger syndrome MAESTRO Ongoing ------------------------------------------------------------------------------- II Ponesimod Multiple sclerosis Extension study Ongoing ------------------------------------------------------------------------------- I Lucerastat Lipid storage - Phase II in disorders preparation ------------------------------------------------------------------------------- I NCE Immunological - Phase II in disorders preparation ------------------------------------------------------------------------------- I Macitentan Glioblastoma - Ongoing ------------------------------------------------------------------------------- I S1P(1) modulator Immunological - Ongoing disorders ------------------------------------------------------------------------------- UPCOMING EVENTS * 9M 2014 Financial Results reporting on 21 October 2014 * FY 2014 Financial Results reporting on 16 February 2015 ### NOTES TO EDITORS BUSINESS REVIEW Dear Shareholders I am delighted to report the excellent progress Actelion has made during the first half of 2014 in achieving our strategic objectives. In the US, where Opsumit(®) (macitentan) has now been available for over 6 months, the launch momentum remains strong. We are also gaining traction in new markets such as Germany, Switzerland, the UK, the Netherlands and Scandinavia, where Opsumit was launched earlier this year. In addition, as recently announced, the top-line results of the pivotal Phase III GRIPHON outcome study with selexipag - the first selective oral prostacyclin IP receptor agonist - bode well for the continued growth of our pulmonary arterial hypertension (PAH) business. Selexipag met the primary efficacy endpoint with high statistical significance, giving us great confidence that regulatory filings can soon be initiated and the product successfully brought to market. The potential incremental cash flow provided by selexipag should allow us to deliver higher returns to shareholders while also investing in future growth opportunities in new specialty therapeutic areas. STRONG FIRST HALF OF 2014 Actelion delivered a strong performance during the first half of 2014. Product sales rose to CHF 993 million (+17% at CER). Core earnings increased to CHF 421 million (+35% at CER), and core earnings per share (EPS) rose by 48% to CHF 3.25. Our products continue to perform well on the market, enhanced by a net impact of CHF 54 million related to US rebate reversals. We saw a strong first half for Tracleer(®) (bosentan), and Opsumit, Veletri(®) (epoprostenol for injection) and Zavesca(®) (miglustat) each contributed to overall growth across all regions. As the product contribution exceeded previous forecasts, we are upgrading our guidance for the full year 2014. OUR FUTURE IN PAH - A POWERFUL PORTFOLIO Our global leadership in PAH has been enhanced by the approvals and launches of Opsumit, with the robust clinical data for this product being recognized in well-differentiated labeling around the world. Our PAH franchise now encompasses products in oral (Tracleer, Opsumit), inhaled (Ventavis(®), iloprost) and intravenous (Veletri) formulations, for patients at various stages of the disease (PAH Functional Classes II-IV), enabling us to deliver treatments across the continuum of care. The potential addition to the portfolio of selexipag should allow us to open up the prostacyclin pathway as a treatment option for many more patients with PAH. Second-quarter sales of CHF 38 million demonstrate the significant progress made with the roll-out of Opsumit. In the US, the product is gaining share from other endothelin receptor antagonists (ERAs) as a result of growing adoption by the PAH medical community. Reimbursement and formulary coverage have now been obtained with most leading healthcare insurers. Outside of the US, launch activities are progressing rapidly, with 10 market introductions in the first half of 2014. Launches are planned for Australia and Italy in the second half of 2014 and for France and Spain in 2015. On the regulatory front, approval was obtained for macitentan in Australia and Mexico in the first half of 2014, and the registration dossier has been filed in Japan and other markets. Overall, the early acceptance of Opsumit by the PAH medical community is highly encouraging, and our commercial strategy has now been validated by multiple successful launches in different geographies. In markets where Opsumit is not yet available, demand for Tracleer is still robust - also driven in Europe by the digital ulcer indication. We will continue to focus on promoting Tracleer for PAH patients in these markets until Opsumit becomes available. Veletri is becoming a successful global product, with strong launch momentum in Japan (as Epoprostenol "ACT") and several European countries. In the US, its share of the intravenous epoprostenol market continues to grow. The results of the GRIPHON study are very exciting. The efficacy of selexipag has substantially exceeded our expectations: the risk of a morbidity/mortality event was reduced by 39% (p<0.0001) versus placebo in patients who - for the most part - were already receiving an oral PAH treatment, and many of whom were receiving an endothelin receptor antagonist combined with a PDE-5 inhibitor. In addition, the regimen of uptitration to the maximum tolerated dose of selexipag was successful, as shown by the low rate of discontinuation. It is important to remember that selexipag is a selective prostacyclin receptor agonist, not a prostacyclin analog, and this mechanism of action could explain the profile we have observed. Accordingly, the use of selexipag will now be evaluated in other indications where selective prostacyclin IP receptor agonism has potential as a therapeutic option. I am delighted that our partners at Nippon Shinyaku - who discovered the compound - chose to pursue an alliance with Actelion, enabling us to realize the global potential of selexipag. Together with Opsumit and Veletri, selexipag will be the engine to transform, diversify and globalize our PAH portfolio. BUILDING ADDITIONAL SPECIALTY FRANCHISES In the first half of 2014, we have also made progress with the second element of our strategy - building additional specialty franchises beyond PAH. We continue to be on the lookout for innovative assets from external sources. However - notwithstanding the current deal-making frenzy in our industry - we will ensure that any business development activities provide a strategic fit, and strengthen Actelion. Valchlor(®) was first launched in the US in November 2013 to cutaneous T-cell lymphoma (CTLC) Centers of Excellence. In March 2014, the expansion of our sales team was completed, and we are now working with dermatologists beyond the CTLC centers. The performance of Zavesca remains strong. Outside of the US, where Zavesca is approved for Niemann-Pick type C disease and is still the only available therapy, growth continues to be driven by greater recognition of the disease and increased diagnosis. Progress is also being made with our clinical development assets. Our novel antibiotic cadazolid is a potent inhibitor of Clostridium difficile protein synthesis, leading to strong suppression of toxin and spore formation. We are currently recruiting into our Phase III development program to assess the efficacy and safety of cadazolid in patients with Clostridium difficile- associated diarrhea; approximately 1,200 patients are expected to be enrolled worldwide. We continue to believe in the therapeutic value of our S1P(1) receptor agonist ponesimod, as we evaluate long-term treatment in the ongoing Phase II extension study in multiple sclerosis. Our team is assessing the opportunity to proceed with an innovative treatment paradigm. Any further development will carefully balance clinical risk and investment, medical need and commercial opportunity, while incorporating health authority input. We are seeking to expand the use of macitentan beyond PAH into the broader pulmonary hypertension setting. In addition, we are evaluating other opportunities for the use of this tailored ERA - for example, in an early-stage program, as a potential therapy for patients with glioblastoma (a form of brain cancer). We expect to report advances from our pipeline assets and preclinical opportunities in the second half of this year. OPTIMIZING PROFITABILITY - UPGRADED GUIDANCE One result of our commitment to maintain and increase profitability is the substantial returns achieved for shareholders. At this year's Annual General Meeting, in addition to a 20% increase in the dividend (to CHF 1.20 per share), you approved the cancellation of the remaining 6 million shares held in treasury after the completion of the CHF 800 million second-line share repurchase program. We have also been pursuing the first-line share purchase program to service employee stock ownership plans. The positive results achieved with selexipag confirm that our endeavors to push the boundaries in PAH therapy are paying off. We continue to create value for the PAH community and for all other Actelion stakeholders, as evidenced by the recent performance of the share price. Given our current business dynamics, we expect to deliver higher profitability in 2014 and are therefore raising our full-year guidance. Barring unforeseen events, we now expect 2014 core earnings growth to be at least in the mid-teen percentage range, at constant exchange rates. This upgraded guidance is a result of a higher product contribution and the positive impact of rebate reversals, mostly related to Medicaid/Managed Medicaid rebates in the US. Removing the impact from rebates associated with US patient assistance programs, we expect 2014 core earnings growth to be at least low double-digit, at constant exchange rates. This very strong 2014 performance will set a significantly higher base for 2015 and we will therefore review our guidance early next year. SHAPING OUR FUTURE Since our value creation strategy was first announced in May 2012, we have made substantial progress. The success of the Phase III studies with Opsumit and selexipag means that we have delivered on our objective to sustain and grow our PAH franchise. We will maintain our launch momentum with Opsumit and work hard to ensure that future launches are equally successful. We are preparing the registration dossiers for selexipag with the vast amount of data collected. With these activities well underway, we are already looking for ways to prolong the PAH franchise far into the future. We are excited by the innovative compounds emerging from our drug discovery efforts and are confident that we can realize our ambition to build additional specialty franchises. We will pursue our efforts to create value for all stakeholders, keeping a close eye on costs. These efforts bring benefits not only for patients, but also for you, our shareholders. I appreciate the trust you have displayed in Actelion and thank you for your continued support. Jean-Paul Clozel Chief Executive Officer FINANCIAL REVIEW CORE PERFORMANCE Actelion continues to measure, report and issue guidance on its core operating results, which more accurately reflect the underlying business performance. Core results exclude contract revenues, as well as costs related to employee stock-based compensation programs, depreciation, amortization, impairments, certain income tax effects and other items that management deems exceptional. A full reconciliation between US GAAP and core results can be found on www.actelion.com. -------------------------------------------------------------------------       % variance ----------------------- in CHF million H1 2014 H1 2013 in CHF at CER((1)) ------------------------------------------------------------------------- Total product sales 993 884 12 17 ------------------------------------------------------------------------- Core R&D expenditure 166 168 (1) 1 ------------------------------------------------------------------------- Core earnings((2)) 421 331 27 35 ------------------------------------------------------------------------- Core net income 378 270 40 49 ------------------------------------------------------------------------- Diluted core EPS (CHF)((3)) 3.25 2.34 39 48 ------------------------------------------------------------------------- (1)) CER percentage changes are calculated by reconsolidating both the H1 2014 and H1  2013 results at constant currencies (the average monthly exchange rates H1 2013). (2)()) Actelion continues to measure, report and issue guidance on its core operating performance, which management believes more accurately reflects the underlying business performance. The Group believes that these non-GAAP financial measurements provide useful supplementary information to investors. These non-GAAP measures are reported in addition to, not as a substitute for, US GAAP financial performance. (3))Core EPS for H1 2013 was recalculated to apply the prevailing tax rate for each adjustment (formerly CHF 2.39, using an average blended rate). PRODUCT SALES Product sales for the first six months of 2014 were CHF 993 million, up 17% at CER compared to the first half of 2013. Excluding the net impact of CHF 54 million US rebate reversals (H1 2014: CHF 61 million; H1 2013: CHF 7.5 million), product sales increased by 11% at CER. Sales by product ------------------------------------------------------------       % variance ------------------ in CHF million H1 2014 H1 2013 in CHF at CER ------------------------------------------------------------ Opsumit 53 - - - ------------------------------------------------------------ Tracleer 791 767 3 8 ------------------------------------------------------------ Veletri 31 14 112 127 ------------------------------------------------------------ Ventavis 58 53 10 15 ------------------------------------------------------------ Valchlor 3 - - - ------------------------------------------------------------ Zavesca 54 48 13 18 ------------------------------------------------------------ Others 2 2 38 56 ------------------------------------------------------------ Total product sales 993 884 12 17 ------------------------------------------------------------ Sales by region --------------------------------------------------------------------------- H1 2014 H1 2014 H1 2013 H1 2013 % variance at CER   (CHF m) (%) (CHF m) (%) --------------------------------------------------------------------------- United States 442 45 367 42 27 --------------------------------------------------------------------------- Europe 368 37 337 38 10 --------------------------------------------------------------------------- Japan 92 9 91 10 15 --------------------------------------------------------------------------- Rest of the world 91 9 89 10 9 --------------------------------------------------------------------------- Total product sales 993 100 884 100 17 --------------------------------------------------------------------------- PAH franchise Opsumit(®) Opsumit (macitentan) sales for the first half of 2014 amounted to CHF 53 million, reflecting a strong launch momentum in all markets where the product has been launched with reimbursement. The robust long-term outcome data of Opsumit has been positively accepted by the PAH medical community and is perceived as differentiated from other ERAs in the market. In the US, reimbursement and formulary coverage has now been obtained with most leading healthcare insurers. Outside of the US, launch activities are progressing rapidly, with Opsumit successfully introduced in Germany, Austria (reimbursement expected Q4), Switzerland, Canada (private market only), the UK, Ireland, Denmark, Norway, Sweden and the Netherlands. Launches are planned for Australia and Italy in the second half of 2014 and for France and Spain in 2015. Regulatory approval was obtained for macitentan in Australia and Mexico in the first half of 2014, and the registration dossier has also been filed in Japan and other markets. Tracleer(®) Tracleer (bosentan) sales amounted to CHF 791 million for the first half of 2014, an increase of 8% at CER compared to the same period in 2013. This increase was largely the result of US rebate reversals related to patient assistance programs, as well as US price increases. However, underlying units sold increased by 1%, driven by continued strong demand in Japan and emerging markets, and by the digital ulcer indication in Europe (particularly Germany and Italy). Demand for Tracleer also remains strong in other markets where Opsumit is not yet available. Veletri(®) Veletri (epoprostenol for injection) sales amounted to CHF 31 million for the first half of 2014, an increase of 127% at CER compared to the same period in 2013. This increase was driven by continued strong uptake in Japan (as Epoprostenol "ACT"), and supported by an increasing share of the intravenous epoprostenol market in the US as well as the various other markets where the product has been launched, such as the UK, Spain, the Netherlands and Italy. Ventavis(®) Ventavis (iloprost) had sales in the US of CHF 58 million for the first half of 2014, an increase of 15% at CER. This increase was driven entirely by price rises, inventory and rebate reversals, as sales volumes continue to be eroded by competitive pressures. These pressures will remain high with the launch of a competitor product in the US during the second quarter of 2014 and is expected to intensify in late 2014 or 2015 as a consequence of potential generic entries. Specialty Products Valchlor(®) Valchlor (mechlorethamine) sales for the first half of 2014 amounted to CHF 3 million. Valchlor was first launched in the US in November 2013 for Stage IA and IB mycosis fungoides-type cutaneous T-cell lymphoma (CTLC) in patients who have received prior skin-directed therapy. In March 2014, the expansion of the sales team was completed, and the company is now working with dermatologists beyond the CTLC Centers of Excellence. Zavesca(®) Zavesca (miglustat) sales amounted to CHF 54 million for the first half of 2014, an increase of 18% at CER compared to the same period in 2013. This performance was driven predominantly by strong patient demand outside the US in the Niemann-Pick type C indication. In the type 1 Gaucher disease market, the performance of Zavesca remains strong, with relatively stable demand and positive price movement in the US. CORE OPERATING EXPENSES ----------------------------------------------------------------       % variance ------------------ in CHF million H1 2014 H1 2013 in CHF at CER ---------------------------------------------------------------- Core cost of sales 104 102 2 6 ---------------------------------------------------------------- Core R&D expenses 166 168 (1) 1 ---------------------------------------------------------------- Core SG&A expenses 301 283 6 11 ---------------------------------------------------------------- Core operating expenses 571 553 3 7 ---------------------------------------------------------------- Core cost of sales Core cost of sales for the first half of 2014 amounted to CHF 104 million, an increase of 6% at CER compared to the same period in 2013, in line with higher product sales. Core R&D expenses Core R&D expenses - which exclude stock-based compensation expenses, amortization and depreciation - were CHF 166 million for the first half of 2014, an increase of 1% at CER compared to the same period of 2013, as clinical development costs increased slightly. Core SG&A expenses Core selling, general and administration expenses - which exclude stock-based compensation expenses, amortization, depreciation and the impact of doubtful debt provisions - were CHF 301 million for the first half of 2014, an increase of 11% at CER compared to the same period of 2013. This increase was driven entirely by costs related to the launches of Opsumit, Valchlor and Veletri in various markets around the globe. The G&A portion remained flat, as Actelion continues to carefully manage operating expenses. CORE EARNINGS ----------------------------------------------------------------       % variance ------------------ in CHF million H1 2014 H1 2013 in CHF at CER ---------------------------------------------------------------- Product sales 993 884 12 17 ---------------------------------------------------------------- Core operating expenses (571) (553) 3 7 ---------------------------------------------------------------- Core earnings 421 331 27 35 ---------------------------------------------------------------- Core earnings amounted to CHF 421 million for the first half of 2014, compared to CHF 331 million during the same period of 2013, an increase of 35% at CER. Excluding the impact of US rebate reversals, core earnings rose by 21%, driven by a solid underlying operational performance and a continued focus on cost management. CORE NET INCOME AND CORE EARNINGS PER SHARE -------------------------------------------------------------------       % variance ------------------ in CHF million H1 2014 H1 2013 in CHF at CER ------------------------------------------------------------------- Core earnings 421 331 27 35 ------------------------------------------------------------------- Core financial expenses (1) (9) - - ------------------------------------------------------------------- Core tax expenses (43) (53) - - ------------------------------------------------------------------- Core net income 378 270 40 49 ------------------------------------------------------------------- Number of shares (million) 116.2 115.2 - - ------------------------------------------------------------------- Diluted core EPS (CHF) 3.25 2.34 39 48 ------------------------------------------------------------------- A full reconciliation between US GAAP and core results is available from www.actelion.com. The core financial result is mainly composed of the interest expense of CHF 6 million on the CHF 235 million bond, as well as a net gain of CHF 4 million from hedging and valuation positions. The core tax expense of CHF 43 million translates into a core tax rate of 10%. This tax rate is a result of a mix of profit in the main countries in which the company operates. Diluted core earnings per share were CHF 3.25 for the first half of 2014, an increase of 48% at CER compared to the same period of 2013. Core EPS for the first half of 2013 of CHF 2.34 was recalculated to apply the prevailing tax rate for each adjustment (formerly CHF 2.39, using an average blended rate). US GAAP RESULTS -------------------------------------------------------------------------       % variance ------------------ in CHF million H1 2014 H1 2013 in CHF at CER ------------------------------------------------------------------------- Revenues 993 885 12 17 ------------------------------------------------------------------------- Operating income 347 262 32 42 ------------------------------------------------------------------------- Net income 420 199 111 126 ------------------------------------------------------------------------- Basic earnings per share (CHF) 3.78 1.78 113 128 ------------------------------------------------------------------------- Diluted earnings per share (CHF) 3.62 1.73 109 124 ------------------------------------------------------------------------- US GAAP operating income includes the following items excluded from core earnings: - Depreciation and amortization of CHF 50 million (H1 2013: CHF 39 million). - Stock-based compensation expenses of CHF 25 million (H1 2013: CHF 25 million). - Reversal of doubtful debt allowance of CHF 1 million (H1 2013: CHF 8 million). - Accretion expenses of CHF 2 million related to the Valchlor contingent consideration. - Operating income for H1 2013 included an arbitration settlement of CHF 13 million. US GAAP net income includes the following items excluded from core net income: - Interest of CHF 10 million on the concluded Asahi litigation - Tax benefit of CHF 121 million due to release of the US valuation allowance related to the Asahi litigation - Tax effect of CHF 6 million on non-core operating expenses (H1 2013: CHF 18 million) CASH FLOW RECONCILED WITH NET CASH POSITION ------------------------------------------------------------------------------- in CHF million Six months ended 30 June Six months ended 2014 30 June 2013 ------------------------------------------------------------------------------- Operating cash flow (excluding 259 299 litigation settlement) ------------------------------------------------------------------------------- Acquisition of tangible, (14) (14) intangible and other assets ------------------------------------------------------------------------------- Acquisition of a business - - ------------------------------------------------------------------------------- Litigation settlement (458) - ------------------------------------------------------------------------------- Operating free cash flow (213) 285 ------------------------------------------------------------------------------- Cash released (restricted) for 609 (250) litigation ------------------------------------------------------------------------------- Cash returned to shareholders (133) (366) ------------------------------------------------------------------------------- First-line share purchase (392) - ------------------------------------------------------------------------------- Proceeds from exercises of stock 187 60 options ------------------------------------------------------------------------------- Other items 11 2 ------------------------------------------------------------------------------- Free cash flow 69 (269) ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- in CHF million Six months ended 30 June Six months ended 2014 30 June 2013 ------------------------------------------------------------------------------- Unrestricted net cash position* 643 888 -  opening balance ------------------------------------------------------------------------------- Free cash flow 69 (269) ------------------------------------------------------------------------------- Unrestricted net cash position* 712 619 -  closing balance ------------------------------------------------------------------------------- *Unrestricted net cash includes cash and cash equivalents plus short-term deposits minus long-term financial debt. Rounding differences may occur. As announced in March 2014, the California Supreme Court denied Actelion's petition for review of the Court of Appeal's decision affirming the final judgment entered against Actelion in November 2011, in Asahi Kasei Pharma Corp. v. Actelion Ltd. et al. Accordingly, Actelion paid CHF 458 million out of restricted cash of CHF 609 million. The remainder of CHF 151 million has been released. Cash returned to shareholders amounted to CHF 133 million as a result of the dividend payment on 15 May 2014. During the first half of 2014, Actelion employees exercised 3.6 million stock options (resulting in proceeds of CHF 187 million) and were issued 0.9 million restricted share units. As part of its ongoing commitment to mitigate dilution, the company bought 4.3 million shares (CHF 392 million) on the first line share purchase program. ABBREVIATED BALANCE SHEET ------------------------------------------------------------------------------- in CHF million Six months ended Twelve months ended Variance in 30 June 2014 31 December 2013 CHF ------------------------------------------------------------------------------- Gross cash position(*) - 947 878 69 Unrestricted ------------------------------------------------------------------------------- Gross cash position - 613 (613) - Restricted ------------------------------------------------------------------------------- Trade and other 434 406 28 receivables, net ------------------------------------------------------------------------------- Other current assets 96 123 (27) ------------------------------------------------------------------------------- Tangible assets 368 381 (13) ------------------------------------------------------------------------------- Intangible assets 436 465 (29) ------------------------------------------------------------------------------- Goodwill 126 126 - ------------------------------------------------------------------------------- Other non-current 140 38 102 assets ------------------------------------------------------------------------------- Total assets 2,547 3,030 (483) ------------------------------------------------------------------------------- Litigation provision - 456 (456) ------------------------------------------------------------------------------- Other current 377 516 (139) liabilities ------------------------------------------------------------------------------- Financial debt 235 235 - ------------------------------------------------------------------------------- Other non-current 109 114 (5) liabilities ------------------------------------------------------------------------------- Total liabilities 721 1,321 (600) ------------------------------------------------------------------------------- Share capital and 2,418 2,252 166 accumulated reserves ------------------------------------------------------------------------------- Treasury shares (592) (543) (49) ------------------------------------------------------------------------------- Total shareholders' 1,826 1,709 117 equity ------------------------------------------------------------------------------- Total liabilities and shareholders' 2,547 3,030 (483) equity -------------------------------------------------------------------------------  *Gross cash position includes cash, cash equivalents and short-term deposits. Rounding differences may occur. ABOUT ACTELION LTD. Actelion Ltd. is a leading biopharmaceutical company focused on the discovery, development and commercialization of innovative drugs for diseases with significant unmet medical needs. Actelion is a leader in the field of pulmonary arterial hypertension (PAH). Our portfolio of PAH treatments covers the spectrum of disease, from WHO Functional Class (FC) II through to FC IV, with oral, inhaled and intravenous medications. Although not available in all countries, Actelion has treatments approved by health authorities for a number of specialist diseases including Type 1 Gaucher disease, Niemann-Pick type C disease, Digital Ulcers in patients suffering from systemic sclerosis, and mycosis fungoides type cutaneous T-cell lymphoma. Founded in late 1997, with now over 2,400 dedicated professionals covering all key markets around the world including Europe, the US, Japan, China, Russia and Mexico, Actelion has its corporate headquarters in Allschwil / Basel, Switzerland. Actelion shares are traded on the SIX Swiss Exchange (ticker symbol: ATLN) as part of the Swiss blue-chip index SMI (Swiss Market Index SMI®). All trademarks are legally protected. For further information please contact: Andrew Weiss Senior Vice President, Head of Investor Relations & Corporate Communications Actelion Pharmaceuticals Ltd, Gewerbestrasse 16, CH-4123 Allschwil +41 61 565 62 62 www.actelion.com Financial Statement: http://hugin.info/131801/R/1832493/636118.pdf Financial Fact Sheet: http://hugin.info/131801/R/1832493/636112.pdf Press Release PDF: http://hugin.info/131801/R/1832493/636109.pdf Webcast: http://view-w.tv/p/120-121-14676/en This announcement is distributed by GlobeNewswire on behalf of GlobeNewswire clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Actelion Pharmaceuticals Ltd via GlobeNewswire [HUG#1832493]


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